The FCA published also published the first Supervisory Notice against Action CIO, a previously authorised debt management firm, in which the FCA communicates its intention to remove the firm’s debt counselling and debt adjusting permissions. Action CIO had been FCA authorised since 23rd May 2017 and provided debt management services on a not-for-profit basis.
The salient points from the notice is that the FCA found that the firm’s debt advice call scripts were deficient (e.g. they contained limit steps for dealing with vulnerable customers and lacked prescriptive guidance to help debt advisers determine which debt solution is in customers’ best interests). The FCA found that the firm’s business plan was unsuitable and failed to address material risks faced by the firm.
The key takeaways from the enforcement action are that firms should treat their compliance documents as ‘live’ documents and adopt a culture of continuous challenge and improvement to its systems and controls. Also, firms should ensure that they (1) keep their business strategy in frequent review to ensure ongoing suitability and (2) maintain a ‘live’ regulatory business plan document that reflects the firm’s current business strategy.